Technology

At Oracle, Simplicity Rules All

December 03, 2002

Just before September 11, 2001, Oracle launched an advertising campaign with "Unbreakable" as its tag line. The message was simple: Oracle was a safe choice. Its databases and application software were foolproof. The campaign was devised by Mark Jarvis, top marketing whiz at Oracle, and represents a major departure for it.

During the Internet boom years, tech advertising and marketing had gotten sloppy: Customers were pouring through the door no matter what, so experimentation was more in vogue than results. An example: In 1998, Oracle ran a TV ad that featured a series of disjointed images of war and conflict -- the result, theoretically, of a lack of knowledge and information-sharing. The ad ended with an image of a red chair -- the "Oracle seat of knowledge" that would end strife in business and perhaps throughout the world.

The campaign was an unmitigated disaster. "The red chair ad is the epitome of how we don't do advertising" now, says Jarvis. "We're very straight, very in your face."

Straight talk is just what the doctor ordered for the suffering enterprise-software market. After a buying binge in the late 1990s, companies are steering clear of new multimillion-dollar implementations that can take months, perhaps years, to pay off. The result: Oracle's revenues have plummeted, dropping from a peak of $10.96 billion in fiscal 2001 to $9.67 billion in fiscal 2002, which ended last May. And though the outlook for corporate software is brightening, Oracle's revenues have continued to tumble. In the quarter ending Aug. 31, they fell 10.4%, from $2.26 billion to $2.03 billion.

To jump-start revenue growth, Jarvis has insisted that simplicity be the foundation not only of Oracle's marketing but also of its product development. Programmers, salespeople, and marketing staff now work closely to satisfy real customer problems, not just deliver glitz. On Nov. 18, Jarvis spoke with BusinessWeek Online Technology reporter Jane Black about his plans to improve Oracle's fortunes. Here are edited excerpts from that conversation:

Q: A chief information officer's top priority today is to integrate applications a corporation already owns. How do you market in an environment when no one wants to buy anything?

A: One way is to simplify the product and message. Three years ago at Oracle, we had 150 application products. Now we have one. We also do a lot of surveys and then tailor our marketing around the survey results. For example, one survey told us that 48% of information-technology budgets are spent on people, the labor costs of making software work. Another survey, done by Forrester Research, showed that 50% of the costs of an application package don't come from purchasing the hardware or the software but from the integration.

Our strategy is to go in and answer those concerns. One example is our fixed-price implementation plan. We guarantee that we'll have our software up and running on a given day, and there'll be no cost overrun. If there is, we'll pay for it.

Q: Is the customer research you do for marketing also affecting product development?

A: The way we develop products has changed dramatically. As I said, a few years ago we had 150 products. [CEO] Larry Ellison's whole push on development has been that he doesn't want 150, he wants one product. And that has forced development to change the way they come up with products.

It's very interesting to see the meetings. The teams come up with what they think is a killer feature. And they want to charge for it separately. And they want to [create separate products] because they believe that's their measure of success. What Larry has forced them to do is realize that their measure of success is how well integrated their product is with all the others -- because that's what customers want. He doesn't measure developers on the revenue they bring in anymore. Now we look at how well integrated they are.

Q: You have emphasized security in your marketing. Why did you decide to do that? And what kind of dividend is that paying now?

A: We haven't focused on security only from a marketing standpoint. We've focused on it from a product standpoint for 25 years. Remember, Oracle's first customer was the CIA. We built security into products from the ground up.

But you're right. It's only in last one-and-a-half years that have we truly marketed our security capabilities. We launched our campaign, called Unbreakable, just before September 11. The moment September 11 occurred, we wondered if we should step back. We were afraid people would think we were exploiting it. But ultimately we decided to go ahead. And that campaign has probably been the most successful we've ever run. Using one word is a very classy approach. "Unbreakable" is a great word that we'll continue to use for a while.

Our advertising is very simple. One or two or three words. Less is more with the ad. Larry and I call it "Japanese gardening." The principle of a Japanese garden is that it's not complete until you've taken out as much as you can.

Q: Sounds like classic marketing to me. Is it more important in software because the customer base is bracing for trouble with complicated products?

A: During the late '90s boom, a lot of companies were doing a lot of marketing and advertising, and it became hard to cut through the noise. Companies like Ariba (ARBA) and CommerceOne (CMRC) slowed the ability of software to mature. They created so much noise, it was impossible to get the message heard.

Now, it's easier to get through, but you have to make sure your message sticks. In some respects, it's traditional marketing -- but in some respects, it's different. Two years ago, we would come up with an idea and go market it. Now we listen to the customer and then build a campaign that targets that customer.

We run them like military campaigns. We look at it like the Gulf War. There are two ways to bomb Baghdad. One way is to drop bombs randomly and see who they hit. The other is to use laser-guided bombs that go straight through the window of who you want to hit. We're in laser-guided bomb mode. We're not dropping daisy-cutters.

Q: Persuading customers to buy everything from one vendor requires an investment of trust. Yet Oracle has, at times, not been perceived as terribly trustworthy. How are you turning that around?

A: According to latest CIO survey from Morgan Stanley, every CIO is looking to reduce the number of vendors they work with. We feel the message is playing to our strength. We point out that we've been around for 25 years, that we have a solid balance sheet. We say that, in the worst downturn, we've increased profitability. We point out when we go into a market, we will stick with the market and work on it until it's perfect. We don't abandon markets.

Those sort of things play nicely. They show that we're a mature company, not a fly-by-night company that might disappear.